National or Regional Currency: Pakistani Rupee, PKR
Population: 174,578,558 (July 2009 est.)
Area: total: 796,095 sq km
Status: 27th largest economy in the world in terms of purchasing power, and the 45th largest in absolute dollar terms.

Wednesday, March 30, 2011

WTF

ISLAMABAD: Petrol and diesel prices are estimated to increase by Rs7 and 10 per litre respectively if the government decides to pass on the full impact of international oil prices to consumers on March 31.

Sources close to the chairman of Oil and Gas Regulatory Authority (Ogra) told Dawn on Monday that a report on the international oil price situation had been submitted to the ministry of finance but had not been deliberated upon because Finance Minister Dr Abdul Hafeez Shaikh and Secretary Finance Dr Waqar Masood Khan were not in town.

The report said the prices of petrol and diesel have increased by 10 per cent and 12.2 per cent respectively in the first 25 days of the current month as the benchmark crude prices hovered around $111.2 per barrel in the Gulf market.

The sources said the government would have to absorb an additional burden of Rs8 billion in case the prices were maintained at the present level but it was left with limited options to do so because of difficult financial position, although political pressure playing a role could not be ruled out.

The sources said the government was required under the finance bill 2010-11 to collect Rs10 and Rs8 per litre as petroleum levy on petrol and diesel respectively but it was charging only Rs3.16 and 44 paisa per litre respectively, following an agreement with the Muttahida Qaumi Movement.

Over the last five months, international oil prices have increased by up to 26 per cent but only 5 per cent impact was passed on to consumers.

The government is reported to have suffered a revenue loss of Rs25 billion during four months — December to March. Prime Minister Yousuf Raza Gilani who is holding the petroleum minister’s portfolio after the restructured federal cabinet, said these officials would take a decision about the price increase on Thursday, most probably after consulting the coalition partners and other political parties.

The sources said the government foresaw further rises in the international market because of expectations of fresh oil purchases by Japan and continued unrest in Libya and Bahrain.
Last month, the government initially increased petroleum prices by 9.9 per cent but had to reduce it to 5 per cent in line with the agreement with MQM.